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1: Had to run each script in SSMS as a query script in SQLCMD Mode 2: I was running in Windows Auth mode, so had to set to Mixed Mode and had to log in with sa account3: Had to enable named Piped in Server Config4: Restart Server--VOILA!--PhB

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I think that CodePlex advices to execute instawdwdb.sql in SSMS not sqlcmd.Are you sure that the System Environment variables SqlSamplesSourceDataPath and SqlSamplesDatabasePath have the correct values and are defined on the level System ?

1: Had to run each script in SSMS as a query script in SQLCMD Mode 2: I was running in Windows Auth mode, so had to set to Mixed Mode and had to log in with sa account3: Had to enable named Piped in Server Config4: Restart Server--VOILA!--PhB